KUALA LUMPUR, June 9 — Asia Gas Hub, an energy market solutions provider, is ready to turn Malaysia into a centre for gas trade in the Asia-Pacific by facilitating the creation of a natural gas exchange in the country.
The company’s chief executive officer, Faris Mustaffa, said the region is yet to have a central hub for gas trade despite accounting for 75 per cent of liquified natural gas (LNG) exports worldwide, and the opportunity is ripe for the picking by Malaysia.
“If the gas exchange is implemented, we estimate we can bring in RM300 billion of GDP over a period of 10 years, and create 200,000 high-paying jobs for traders, analysts and risk managers,” he said.
Faris said Malaysia is in an advantageous position as it has an extensive network of gas pipelines that connect it with countries such as Singapore, Indonesia and Thailand, as well as being on important routes for seaborne energy trade.
Faris, who has spent over 30 years working in the oil and gas industry, further stated that Malaysia is the fifth largest exporter of liquified natural gas (LNG) in the world.
He added that the creation of the gas exchange would go hand-in-hand with the government’s aim to liberalise the local gas market.
Faris is referring to the Economic Transformation Program (ETP) — an initiative launched by the government in 2010, to elevate the country to developed-nation status — where one of the aims is to liberalise the local gas market.
The ETP had stipulated the creation of a third-party access system, where third parties are allowed to access gas facilities that they do not own or operate, through the enactment of the Gas Supply (Amendment) Act 2016.
Further aligning with government initiatives, Faris said the gas exchange would be beneficial to Malaysia’s move to become a carbon-neutral society by 2050, as gas is a cleaner source of fuel.
According to the US Energy Information Administration, burning natural gas for energy results in fewer emissions of nearly all types of air pollutants and carbon dioxide (CO2) compared to burning coal or petroleum products for an equal amount of energy.
Citing statistics from a Shell environmental impact study, Faris added that burning natural gas resulted in about half the CO2 emissions of burning coal.
“The Malaysian market will be more accessible and gas will be readily available at a transparent market price and at the most competitive price in the region.
“This, in addition to tools to manage the price risk, will make Malaysia an attractive destination for investments.
“Furthermore, as power producers will be able to get gas at the most competitive prices in the region, this would support a move from coal plants to gas-fired power plants,” he said, adding that homes could also receive direct gas pipes to fuel appliances like what is done in European countries.
In September 2021, following the release of the 12th Malaysia Plan, Prime Minister Datuk Seri Ismal Sabri Yaakob announced that the government will no longer build new coal-fired power plants.
In the same month, Tenaga Nasional Bhd committed to retiring all its coal-fired power plants by 2044.